CAIRO: The international business climate has seen better days, but that hasn’t stopped the Cairo Chamber of Commerce from moving ahead with plans to improve Egypt’s prospects for economic growth.
The chamber, which has a membership of 600,000 companies, is actively engaged in forging international partnerships and working with government agencies to improve the ease of doing business. It also provides training, financial and legal support and information services to small and medium enterprises in the capital.
Daily News Egypt sat down with the chamber’s chairman, Ali Moussa, to learn more about its current activities, the positive side of the financial crisis and the challenges of doing business in Egypt.
Daily News Egypt: You were a panelist at the Global Trade Matters conference last week; what is the role of international cooperation in the chamber’s activities?
Ali Moussa: A large part of our work involves pushing for protocols with different chambers abroad. For example, we have a very active cooperation with Istanbul. They are exchanging information and experts with us, and helping us provide training for our employees.
We also work with the Paris Chamber of Commerce, which has one of the best reputations for training in the world. In exchange for their expertise, we give these countries access to our markets, which they have helped improve.
Another aspect of international cooperation is organizing conferences to expand trade relationships; we are currently organizing a trade conference for the Islamic world so we can get to know the players in some of these countries.
Lastly, cooperation helps us obtain useful and accurate information to facilitate trade. For example, if we work closely with China we can avoid problems with below-standard imports and protect local importers by working to compile a list of legitimate and respectable partners for them to work with in China.
What are some of the major projects the chamber is working on?
We are doing several things right now, but our newest initiative is our retail academy. The GATT and other trade agreements have opened borders, allowing investors to come to Egypt. This, combined with a larger middle class with increased purchasing power, has attracted international retailers to Egypt.
The retail academy is meant to enhance the ability of small companies to compete with these large retailers in the local market. We want to see small retail enterprises understanding how to do a window display, knowing how to sell, how to keep proper stocks, how to manage space, and how to do proper accounting.
We also have a project called Iqtidar that we run with the UNDP. This project focuses on helping people how to learn to do business. We have other joint projects with Microsoft, HP and Samsung to provide technology to small businesses and the Ministries of Information Technology and Trade and Industry are involved as well.
How has the financial crisis impacted the livelihood of the chamber’s member companies?
The financial crisis has impacted certain industries in Egypt negatively and benefitted others. For example, internal trade has improved due to increased competitiveness of Egyptian goods. The building material sector has done well also; I’ve seen a 20-30 percent increase in all my businesses over the past month.
Sectors that have been hit include Suez [Canal], and industries that rely on exports, such as manufacturing and agriculture. There has been a lot of talk about tourism, but I don’t think it was hit as badly as other areas, because Egypt is a cheap destination and I think people have continued to come.
Do you think the crisis presents an opportunity for growth and change in Egypt’s economy?
A positive aspect of the crisis was that it made the government activate infrastructure projects faster. Egypt needs infrastructure projects badly and the planned projects are vital, so the sooner they are begun the better. Moving planned projects forward can stimulate the economy, increase liquidity and boost positive outlook in the short term.
It’s not enough to just say the projects will be moved though; we need to rethink tendering procedures. You cannot schedule a project to be tendered in three months and then extend the beginning of a project over a year. Procedures need to be sped up and protocol needs to be changed to allow expediency.
We could do this by creating a higher body with authority to act to push through initiatives to help the crisis. We need a strong organization with a mandate to cut through red tape and get the economy moving.
Do you think public-private partnerships might be a good tool to expedite these infrastructure projects?
This has been done with housing, which was not linked to the crisis, but rather to a supply crisis. I think that it is a clever way to deal with frustrations in the market and it has been very successful in Egypt. It could be applied in other vital areas such as constructing important transportation infrastructure like highways and ports.
The Ministry of Electricity has already begun partnering with the private sector for renewable energy projects. The beauty of the arrangement is that it doesn’t put a burden on the government and is profitable for the private sector, and accomplishes something important. The private sector also normally does better work because they are accountable, and this benefits everyone.
What are some of the major challenges in Egypt’s business climate?
There are several major issues. First is the lack of quality, useful information available. We need to record trends in prices, demand, and stocks and we want to produce proper consumer confidence indexes. We also need to focus on the relationship between the authorities and retail to improve cooperation and eliminate corruption.
The permit process is another issue, and we are addressing this in cooperation with the Ministry of Trade. We’ve established a pilot program called the Center of Excellence that brings together representatives from different administrative authorities. Businesspeople can go there to apply for permits and obtain information in an efficient manner.
[Trade] Minister [Rachid Mohamed] Rachid is planning to expand the model into other areas of the country as well.
